The Delta variant of COVID-19 is now the dominant strain around the world, causing a wave of deaths among unvaccinated people. There are growing fears that the unleashed variant of the coronavirus threatens the prospects for a global economic recovery.
Despite the fact that Delta risk is looming, currency trading is picking up pace slowly but steadily, which is a reassuring sign for investors worried about swaying demand and surging prices. Forex trading is booming all over the world, as traditional forms of investing, such as stock trading, continue to be practiced, it is currency trading that has gained momentum. among investors in the financial market.
Not only will the foreign exchange trading market remain active, but it will also tend to increase the size of the exchanges. The most influential factors in the Forex market are listed as follows:
- Risk management
- International investments
- Access to information
- Advanced computers
Daily Forex volume has increased 40% over the past decade. According to JP Morgan, artificial intelligence and machine learning will be the two most important characteristics in shaping the future of currency trading. About 90% of successful Forex traders use robots these days. Thanks to these revolutionary technologies, they are able to analyze impressive amounts of data, monitor their performance in real time and simplify trading processes.
Forex foreign exchange market is expected to grow at a CAGR of 7.5% during 2021-2026
Increasing digitalization and urbanization in emerging and developed markets are the main growth drivers in the forex market. Minimal trading costs, new trading opportunities, and high transaction transparency and liquidity have driven the acceptance of Forex across the globe. It is not surprising that currency trading is experiencing healthy growth. Individuals around the world can participate in buy and sell currencies with another. Typically, Forex traders are active financial professionals who trade Forex for a living. However, ordinary people also make money by trading Forex.
The landscape of the forex market is very competitive. Some of the top foreign exchange companies worth mentioning are BNP Paribas, Citibank, Barclays, Deutsche Bank, Goldman Sachs and The Royal Bank of Scotland. This list is of course not exhaustive. In order to stand out, companies struggle to find new and unique ways to promote themselves. The result is the introduction of valuable products that meet the needs and wants of customers. Rather than providing specific services, exchange companies are doing everything possible to improve the user experience. Needless to say, more resources are needed to keep pace with progress.
The number of US-based retail traders tends to be quite low
By the time the North American session goes live, the Asian market is already closed. The activity in New York marks the high volatility and participation in the session. The Forex session opens at 8:00 a.m. and ends at 5:00 p.m. Completely unexpectedly, the number of active Forex traders in America is extremely low. The question now is: why? The explanation lies in the fact that not all brokers are willing to accept clients from the United States due to the very strict regulations. Specifically, the requirements are difficult to meet. In order for a broker to legally operate in America, they must be regulated by the National Futures Association, even if they already have a license issued by the FCA.
Of course, it doesn’t end there. The self-regulatory body for the US derivatives industry requires every broker to have at least $ 20 million to operate in the country. Some might be able to afford these fees, but others simply cannot. Offshore Forex brokers have stopped accepting US clients to avoid high fees, operational costs, not to mention the waste of paper. It’s not all bad news, however. There are a few offshore brokers ready to provide Forex trading services to US traders. These brokers typically offer leverage ranging from 1: 1000 to 1: 5000. Let’s not even talk about the best trading conditions and the quality of execution.
The bottom line is that there are good reasons why the vast majority of Forex brokers refuse to cooperate with clients from the United States. The highly regulated environment associated with exorbitant costs does not leave too many choices for brokers. All hope is not lost. There are several brokers regulated by the United States that accept American clients. For now, transactions are increasingly done on mobile devices, so the traditional computer is losing favor. Internet-connected devices are used to initiate currency trading, as the MT4 and MT5 platforms have mobile versions. Last but not least, it’s easier to send and withdraw money.
How Does the Forex Trading Process Work?
Foreign currency trading is not more difficult compared to other financial activities. Nevertheless, it presents peculiarities and risks. The trader has a specific currency pair that he watches. It is up to the trader to decide whether he wants to buy or sell these currency pairs from the broker. Likewise, the broker can accept or reject the request. If the order is accepted, we have what is called a live agreement. The transaction is completed in real time, so the trader is immediately informed of what is going on. Forex trading can be very lucrative, but it is essential to understand how the forex markets work.
More often than not, research is needed. Traders take the time to understand the value proposition and the risks in order to make the right choice. Have a diversified portfolio – in other words, opting for investments in multiple currencies – is always a good idea. This minimizes the risk of losses and improves long-term savings. Many budding traders get involved in the forex market. Speaking of which, Forex trading is expected to be here to stay. Anyone who is educated in the field can accumulate significant wealth since Forex is a global market. It is recommended that you register with a regulated broker for security reasons.